Income Tax

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Tax

14. Income Tax

The provision for income tax expense (benefit) is comprised of the following:

	2018		2017
Current tax, federal	$	221,758	$	547,486
Current tax, state		82,806		132,833
Current tax, foreign		112,449		-
Current tax, total		417,013		680,319
Deferred income tax, federal		-		(11,069	)
Deferred income tax, state		-		(2,686	)
Deferred income tax, foreign		759,493		385,639
Deferred income tax, total		759,493		371,884
Total	$	1,176,506	$	1,052,203

The following table reconciles the income tax benefit at the U.S. Federal statutory rate to income tax benefit at the Company’s effective tax rates.

	2018			2017
Income (loss) before tax, net of tax from gain on involuntary disposition		3,054,847			3,420,556
Tax from gain on involuntary disposition		693,063			(613,611	)
Income (loss) before taxes		3,747,910			2,806,945
US statutory tax rates		28.51	%		39.69	%
Expected income tax (recovery)		1,068,342			1,114,147
Non-deductible items		354,548			520,665
Change in estimates		61,361			(91,632	)
Change in enacted tax rate					189,626
Option expired during the year		5,191			21,640
Functional currency adjustments		116,996			-
Foreign tax rate difference		(393,794	)		(662,381	)
Change in valuation allowance		(36,119	)		(39,863	)
Total income taxes (recovery)		1,176,506			1,052,203
Current income tax expenses (recovery)		417,013			680,318
Deferred tax expenses (recovery)		759,493			371,884
Total income taxes (recovery)		1,176,506			1,052,203

Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Deferred tax assets (liabilities) at December 31, 2018 and 2017 are comprised of the following:

	2018			2017
Canada
Non capital loss carryforwards		556,462			1,378,242
Patents		63,998			69,597
Fixed assets		(350	)		-
Financial instruments		-			-
		620,110			1,447,839
Valuation Allowance		-			-
Net Deferred tax asset (liability)		620,110			1,447,839

	2018		2017
USA
Fixed Assets	247,665		351,746
Intangible assets	(989,569	)	-
Stock-Based Compensation	173,739		154,023
	(568,165	)	505,768
Deferred tax asset not recognized	153,565		189,684
Net Deferred tax asset	(414,600	)	316,084

The Company has non-operating loss carryforwards of approximately $2,060,971 (2017 - $5,097,682) which may be carried forward to apply against future year income tax for Canadian income tax purposes, subject to the final determination by taxation authorities, expiring in the following years:

Expiry	Loss
2032		401,480
2037		1,659,491
Total		2,060,971

As at December 31, 2018, the Company has no net operating losses carryforward available for US tax purposes.

Accounting for Uncertainty for Income Tax

Effective January 1, 2009, the Company adopted the interpretation for accounting for uncertainty in income taxes which was an interpretation of the accounting standard accounting for income taxes. This interpretation created a single model to address accounting for uncertainty in tax positions. This interpretation clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements.

As at December 31, 2018 and 2017, the Company’s consolidated balance sheets did not reflect a liability for uncertain tax positions, nor any accrued penalties or interest associated with income tax uncertainties. The Company has no income tax examinations in progress.